Challenging Myths: Renters Insurance Edition

Myth: Only people who rent a house need renters insurance.

Reality: FALSE. According to the Bureau of Insurance, “Renters insurance is for anyone who rents an apartment, condo or house, instead of owning the premises.” Renters insurance provides protection for your personal property from perils such as fire or theft, and liability protection if you accidentally hurt someone or damage their property.

Myth: My landlord’s insurance covers me.

Reality: FALSE. While your landlord may have insurance, your belongings are NOT covered under this. The owner of the property is only responsible for insuring the building and for his/her own liability coverage. According to About, your landlord’s insurance covers his/her loss in a situation where the building is destroyed, but not the property inside of it, i.e. your personal property. Your landlord’s insurance also covers an incident where someone is hurt on the property, but not if one of the residents accidentally hurts someone else or damages another person’s property.

Myth: I don’t need liability insurance.

Reality: FALSE. According to State Farm, “Your landlord's policy most likely excludes liability for something that occurs in your rented residence.” If you injure someone or damage their property, and they decide to sue, the money will be coming out of your pocket unless you carry liability insurance. Liability insurance, which is included with renters insurance, can also cover legal defense costs depending on the amount of liability in your policy.

Myth: My roommate has insurance, so I don’t need it.

Reality: FALSE. Although your roommate might have insurance, this only covers his/her personal belongings, not yours, unless you are listed on his/her policy. It is encouraged to get a single policy to cover everyone who lives in the apartment and all of the possessions.

Myth: Renters insurance is expensive.

Reality: FALSE. For only a couple hundred or less a year, the average renter can get full coverage for their apartment. This can include liability insurance, which was explained above, to protecting you from a lawsuit dealing with the harm of someone or someone’s property. According to Insure.com, “keeping your premium low is also another way to keep renters insurance inexpensive. Your premium depends on where you live, your deductible, your insurance company, and whether you need any additional coverage.” This implies that if you increase your deductible, your responsibility for an incident, then your premium can decrease, making renters insurance less expensive. NOTE: Be sure you can afford the deductible you choose, it is coming out of your pocket when something bad happens.

Myth: I don’t have a lot of stuff or I don’t have expensive belongings, so I don’t need renters insurance.

Reality: FALSE. Many people are surprised how much their personal belongings are actually worth. Renter’s insurance policies are available in varying amounts, but, it’s important to remember that you are not just protecting your personal property; you are also protecting yourself from liability. Find out how much renters insurance you need.

Myth: All renters insurance covers actual cash damages

Reality: FALSE. It actually depends on the type of policy you have, actual cash value vs. replacement cost. According to Insure, “Actual cash value coverage will pay only for what your property was worth at the time it was damaged or stolen, the “used value”, minus your deductible. [While] replacement cost coverage will pay what it actually costs to replace the items you lost, again minus the deductible.”